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File photo of Quebecor chief executive Pierre Karl Péladeau. (Ryan Remiorz/THE CANADIAN PRESS)
File photo of Quebecor chief executive Pierre Karl Péladeau. (Ryan Remiorz/THE CANADIAN PRESS)

Pierre Karl Péladeau surprises by stepping down at Quebecor Add to ...

Pierre Karl Péladeau surprised the media industry and even some Quebecor Inc. directors by stepping down as chief executive officer and handing the company to his most trusted lieutenant, Robert Dépatie.

The 51-year-old Mr. Péladeau said he wants to devote more time to his young family and his charitable activities, and that running Quebec’s largest cable and media empire has been all-consuming. “Simply put, for many years my life has been Quebecor,” he told analysts and investors on a conference call. “In most cases, to the exclusion of everything else.”

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The decision continues a pattern of change inside the executive suite of the country’s largest media and communications firms, which have been roiled by major shifts in technology and consumer behaviour in recent years. Rogers Communications Inc. said last month that Nadir Mohamed will step down in early 2014, triggering a search for a new CEO. Shaw Communications Inc. moved Brad Shaw into the top job a little more than two years ago.

Mr. Péladeau informed Quebecor’s board of his decision only on Wednesday, said former prime minister Brian Mulroney, a Quebecor director and a long-time mentor. “He didn’t want there to be any leaks. [The board] was stunned when he told them,” Mr. Mulroney said. “They didn’t want him to go, I can tell you that.”

Mr. Péladeau had been talking about stepping back for some time to focus on corporate strategy and take up new challenges, he said. Mr. Péladeau has long admired Microsoft founder Bill Gates, who stepped down as CEO in his prime to focus on philanthropy. “Pierre Karl is one of these guys who is actually in love with his wife, loves his kids and realizes that, for the last 15 years, it’s been Quebecor [and little else],” said Mr. Mulroney, who joined Quebecor’s board in the mid-1990s and remains vice-chairman.

Mr. Péladeau is not leaving completely – his family owns a controlling stake of the voting shares, which he said he has no intention of selling.

Mr. Péladeau will continue to oversee the media operations as chairman of Quebecor Media and television service TVA. He will also be vice-chairman of the board at Quebecor Inc., with Françoise Bertrand remaining as chairman.

The move casts a spotlight on Mr. Dépatie, who runs the company’s Vidéotron Ltée cable unit.

When he was appointed president of that business in 2003, skeptical analysts wondered what an executive who spent most of his career selling soft drinks knew about the increasingly high-tech world of television.

A decade later, Videotron is among the most innovative cable companies in the country. He inherits a company that is generating solid profits and growth in its telecommunications business that includes cable and wireless, but is aggressively slashing costs in its news media division as it desperately tries to compensate for sharp declines in print advertising in its dozens of daily and weekly newspapers across the country.

“A lot of people asked what a soft-drink salesman would know about cable when he came into the company in 2003,” said Canaccord Genuity analyst Dvai Ghose, referring to Mr. Dépatie’s past roles at companies such as Distributions Alimentaires Le Marquis/Planters, of Les Aliments Small-Fry (Humpty Dumpty), and HJ Heinz Canada.

“But he just said ‘Hey, marketing is marketing.’ And he’s taken a cable company that was probably the worst in the country when he inherited it and made it the best in Canada.”

While the company has seen explosive growth in its cable television and telecommunications division – since Mr. Dépatie took over in 2003, operating profits have increased to $1.2-billion from $275-million – its media operations have struggled to adapt to a brutal advertising market that has seen revenues plunge across the industry.

Mr. Dépatie’s challenge was highlighted when Quebecor reported its fourth-quarter earnings Thursday – operating profit increased 5 per cent in the telecommunications division to $310-million while it slid 17 per cent to $38.6-million in the media division.

The 53-year-old is largely credited with guiding the cable company through a transition that has seen an increased focus on digital products, which has helped it mitigate losses to its traditional cable business. He’s also built one of the loosest subscription models in the country, with more choices for consumers who don’t want to be saddled with large bundled packages in their television subscriptions.

“It’s known by everybody that Vidéotron is quite an enviable success and we need him to take that approach with the whole of the company,” said Quebecor chair Ms. Bertrand. “He is someone with vision and enthusiasm that nobody else has, other than Pierre Karl himself. He’s adamant that success is about more than technology – it’s also about providing good service.”

Ms. Bertrand said the board “wasn’t ignorant” of the Rogers CEO search but also wasn’t influenced by it, emphasizing that a succession policy has been in place for some time.

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Pierre Karl Péladeau’s long history of controversy

August, 2000

Mr. Péladeau attacks critics on Bay Street and in the media who don’t like Quebecor’s proposed takeover of Groupe Vidéotron – a counterbid to Rogers Communications’ offer.

“Emotions tend to cloud judgment and that may explain why certain people have such a hard time grasping the business rationale for Quebecor's bid, much less reporting on it in an objective manner,” he says in an opinion piece published in The Globe and Mail. Quebecor eventually closes the deal.

November, 2000

Mr. Péladeau launches a campaign to oust the CEO of newsprint giant Abitibi-Consolidated Inc., whose biggest shareholder is Quebecor. Montreal-based portfolio manager Stephen Jarislowsky, also an Abitibi shareholder, denounces Quebecor’s “rambunctious” behaviour. CEO John Weaver fights back, and keeps his position, but Mr. Péladeau gains more influence on the Abitibi board.

April, 2002

Mr. Péladeau alleges that BCE Inc.’s Bell ExpressVu satellite television subsidiary is practising a “blatant form of cross-subsidization” by allowing Bell ExpressVu to tap into the cash flow of Bell Canada. In retaliation, BCE pulls advertising from Quebecor outlets. The CRTC dismisses the complaint.

May, 2003

At the Quebecor annual meeting, Mr. Péladeau ridicules some of Radio-Canada’s programming as a “joke” and charges that the French-language public broadcaster gets more than its fair share from the Canadian Television Fund. He asks the federal heritage minister, Sheila Copps, to change the rules governing the fund in favour of a more equitable distribution of money among both private and public broadcasters.

October, 2003

At a CRTC hearing, Mr. Péladeau accuses BCE of pumping money into Bell ExpressVu service with the sole intention of financially damaging its cable rivals so they won't be able to compete in local telephone service. Mr. Péladeau says BCE is “willing to do anything to get market share from cable distributors,” and to do so it is “taking the broadcasting system as a hostage.”

May, 2004

It is alleged that Mr. Péladeau has arranged for the firing of up-and-coming comic Louis Morissette from a new reality TV show on the Quebecor-owned TVA television network because of the the way Mr. Péladeau and Julie Snyder, his business and romantic partner, were portrayed in a satirical sketch. Quebecor officials vociferously deny that Mr. Péladeau had anything to do with the dismissal.

February, 2007

Mr. Péladeau says he wants Quebecor to be able to opt out of the Canadian Television Fund that supports domestic production. The private sector is unfairly being forced to subsidize the public broadcasting sector through the fund, he says.

April, 2007

Quebecor locks out employees of its newspaper, Le Journal de Québec. The lockout last for more than a year. In January 2009, it locks out employees of sister paper Le Journal de Montréal, in a dispute that lasts more than two years.

November, 2008

Mr. Péladeau takes personal control of Sun Media Corp. and the Canoe online operations. Within weeks he lays off 600 workers.

January, 2010

In an open letter published in his Journal de Québec, Mr. Peladeau hits out at trade unions, saying they benefit from too many unjustifiable “privileges” that are hobbling economic development. He slams the unions for what he says are their entrenched ways that have no place in a global economy.

June, 2010

Mr. Péladeau says he will shake up television news in Canada, with the launch of Sun TV, a 24-hour cable channel modelled on the right-leaning U.S. Fox News network.

October, 2011

Mr. Péladeau accuses the CBC of deliberately withholding information requested by the reporters in his media chain. He says the access requests have been met with “pro-active delays, exorbitant demands for search fees, numerous complaints, and, in the end, very little information to Canadians about how the state broadcaster managed public funds.”

September, 2012

Quebecor begins a campaign to kill BCE’s takeover of Astral Media Inc. Mr. Péladeau call the deal “a monster in front of us.” Quebecor leads the “Say No To Bell” coalition that runs ads warning consumers that their bills will go up and choices go down if the deal is approved

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